OVERVIEW OF CHALLENGES FACING BLOCKCHAIN-BASED CRYPTOGRAPHIC CURRENCIES

Blockchain, the foundation of Bitcoin, has received extensive attentions recently. Blockchain serves as an immutable ledger, which allows transactions take place in a decentralized manner. Blockchain-based applications are springing up, covering numerous fields including financial services, reputation system and Internet of Things (IoT), and so on. However, there are still many challenges of blockchain technology such as scalability and security problems waiting to be overcome. Blockchain has numerous benefits such as decentralization, persistency, anonymity and auditability. This paper presents a comprehensive overview on blockchain technology. We provide an overview of blockchain architecture firstly and compare some typical consensus algorithms used in different blockchains. Furthermore, technical challenges and security issues are briefly listed. We also lay out possible future trends for blockchain. In general, everything that can be written down on paper can be written in a blockchain with only one difference in a blockchain it is simply impossible to substitute or forge records. In contrast to computer security taken in a traditional sense, the notion of identification is as important here as that of authentication. Every time a transaction or block of data is added to the chain a majority of the network must verify its validity. In the case of a contractual blockchain, the identification must take into account the complete person-identity-proof sequence to create legal effects. This article reviewed challenges that might arise on every step of integrating decentralized peer-to-peer cryptocurrency into our daily lives. It discussed implementation details and problems and challenges that might arise during the cryptocurrency adoption phase. Despite the possible challenges, cryptocurrencies might still shape the future of digital payments and create their own niche.

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